The remaining major capital markets without an IFRS mandate are:
• The US, with no current plans to change for domestic registrants (full IFRS allowed for non-US filers);
• Japan, where voluntary adoption is allowed, but no mandatory transition date has been established;
• China, whose accounting standards are converged with IFRS to some extent.
IFRS requirements elsewhere in the world impact US companies through statutory reporting requirements of US multinationals, cross-border merger and acquisition (M&A) activity, and the IFRS reporting demands of non-US stakeholders. It is clear from a preparer perspective that being financially bilingual in the US is important.
From an investor perspective, the need to understand IFRS is arguably even greater. US investors keep looking overseas for investment opportunities. Recent estimates suggest that trillions of US capital are invested in foreign securities. The US markets also remain open to non-US companies that prepare their financial statements using IFRS. There are currently approximately 500 non-US filers with market capitalization in the multiple of trillions of US dollars that use IFRS without reconciliation to US GAAP.
To assist investors and preparers in obtaining this bilingual skill, this publication provides a broad understanding of the major differences between IFRS and US GAAP as they exist today. While this publication does not cover every difference between IFRS and US GAAP, it focuses on those differences we generally consider the most significant or most common.